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What is considered a good pay increase?
Data from the Australian Bureau of Statistics and the Reserve Bank of Australia shows that the annual wage growth in Australia only ranged from 1.6 per cent to 2.7 per cent in 2018 – just enough to negate the effects of inflation.
What is considered a good pay increase?
Data from the Australian Bureau of Statistics and the Reserve Bank of Australia shows that the annual wage growth in Australia only ranged from 1.6 per cent to 2.7 per cent in 2018 – just enough to negate the effects of inflation.
But, according to the 2019 Australia Salary Guides, the slow wage growth has made many Aussies unhappy and most are planning to ask for a salary increase in 2019. Of those who are ready to negotiate for a raise, about 45 per cent expected a 3 to 7 per cent increase – but is this rate good enough?
What is a good raise percentage?
With inflation rate sitting at 1.3-1.6% average every quarter, it’s getting harder to maintain your standard of living without an annual pay increase. At bare minimum, a good raise percentage is ideally a rate that can counter the inflation rate.
This means that if inflation is at 2.3 per cent for the year, the increase you’ll need to maintain your current lifestyle should be a minimum of 2.3 per cent of your current base salary. However, you also have to consider the impact of tax on your take-home pay at the end of the day.
Can I demand above the company’s standard increase rate?
The first thing you need to check is your contract and general company policy regarding pay reviews.
Most large corporations have a standard pay review increase of up to 3 per cent, but this isn’t always the case. If you’re not sure about the pay review policy, consider asking some of your colleagues or the HR department so you can better manage your expectations.
Knowing the average pay increase within your company would also help you negotiate better. It would be hard to ask for a 10 or 15 per cent increase if the company standard ranges from 3 to 4 per cent for all employees and executives.
While it’s possible for top-performing employees to ask for a 10 to 15 per cent pay increase, it’s also not a very common practice.
How can I negotiate a higher raise?
Do your research to determine how well the company performed in the past fiscal year. If the company has earned a significant profit, there’s a higher chance that your pay review will be accepted at the rate you desire.
Be prepared for your performance review so your manager will have an easier time deciding on your pay raise. Showing that you have consistently exceed the monthly quota or if you have led and delivered a significant project for the team will definitely help with your argument.
Timing is important when negotiating for an increase. You need to make sure that the company is actually doing well before you ask for one or you might have a higher chance of being rejected.
You might also want to consider alternative benefits ( aside from a pay increase) that may contribute to a higher standard of living for you. If your company allowed for flexible working conditions, you might want to ask to work from home a few days a week. This might help save on transport and lunch expenses. You may also ask for an internet allowance to help pay your internet bills.
Asking for a raise can be nerve-racking, especially when you’re unsure whether the rate you’ll ask for will be accepted. Making sure that you have the performance to back it up and taking time to learn more about the industry’s salary benchmark for your role before asking will definitely help with the process.
Explore nestegg for more tips on earning.
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